Nifty bounce back in final hours to reach two-year highs

S&P CNX Nifty ended at two-year highs amid strong corporate earnings and the expectations of a generous rate cut by the Reserve Bank of India (RBI). On global front, Asian equity indices made a mixed closing as worries about the US debt ceiling impasse led investors to take profit after a strong recent run. Meanwhile, European counters traded cautiously in the early deals as a speech by Federal Reserve Chairman Ben Bernanke failed to inspire traders.

Back home, Indian equity benchmark made a positive start amid positive domestic cues. Market continued its positive trades as investor sentiments was boosted by the strong corporate earnings and hopes of rate-cut from RBI, in its upcoming monetary policy review on January 29. In mid noon session, market pared its early gain on account of selling in frontline stocks, but suddenly picked up, crossing crucial 6,050 level and reached intra-day high on the back of banking stocks on better than expected third quarter results of two private sector lenders viz. Axis Bank and South Indian Bank. Finally, Nifty ended the session with a gain of half a percent.

Meanwhile, most of the sectoral indices on the NSE made a mixed closing. CNX Infra up by 1.26%, CNX Realty up by 1.18%, CNX FMCG up by 0.78%, CNX Energy up by 0.52% and CNX Finance up by 0.44% remained the top gainers in the trade. While CNX Media down 0.53%, CNX IT down 0.26%, CNX Metal down 0.22% and CNX PSU Bank down 0.11% remained the losers. The India Volatility Index (VIX), a gauge for market’s short term expectation of volatility, down by 0.88% and reached 13.58.  

The India VIX witnessed contraction of 0.88% at 13.58 as compared to its previous close of at 13.70 on Monday.

The 50-share S&P CNX Nifty gained 32.55 points or 0.54% to settle at 6,056.60.

Nifty January 2013 futures closed at 6,081.30 on Tuesday at a premium of 24.70 points over spot closing of 6,056.60, while Nifty February 2013 futures ended at 6,121.00, at a premium of 64.40 points over spot closing. Nifty January futures saw contraction of 0.43 million (mn) taking the total outstanding open interest (OI) to 15.50 mn units. The near month January 2013 derivatives contract will expire on January 31, 2013.

From the most active contracts, Reliance Communications January 2013 futures were trading at a premium of 0.50 at 86.60 compared with spot closing of 86.10. The number of contracts traded was 15,537.

ITC January 2013 futures were at a premium of 0.40 at 284.70 compared with spot closing of 284.30. The number of contracts traded was 11,521.

DLF January 2013 futures were at a premium of 0.10 at 252.90 compared with spot closing of 252.80. The number of contracts traded was 21,573.

Reliance Industries January 2013 futures were at a premium of 4.10 point at 851.20 compared with spot closing of 847.10. The number of contracts traded was 16,453.

ICICI Bank January 2013 futures were at a premium of 1.45 point at 1209.50 compared with spot closing of 1208.05. The number of contracts traded was 19,884.

Among Nifty calls, 6,200 SP from the January month expiry was the most active call with an addition of 0.39 million open interest.

Among Nifty puts, 5,900 SP from the January month expiry was the most active put with an addition of 0.02 million open interest.

The maximum OI outstanding for Calls was at 6200 SP (8.45 mn) and that for Puts was at 5900 SP (8.18 mn).

The respective Support and Resistance levels are: Resistance 6077.2 -- Pivot Point 6047.9 -- Support 6027.3.

The Nifty Put Call Ratio (PCR) OI wise stood at 1.36 for January -month contract.

The top five scrips with highest PCR on OI were Welcorp 5.00, SRTransfin 2.75, Infosys 2.43, GUJ Fluoro 2.38 and Bharti Airtel 1.21.

Among most active underlying, Unitech witnessed contraction of 4.70 million of Open Interest in the January month futures contract followed by IFCI which witnessed an addition of 2.68 million of Open Interest in the near month contract. Meanwhile, Jaiprakash Associates witnessed of contraction of 2.54 million in the January month futures. Also, RCOM witnessed an addition of 2.90 million in Open Interest in the January month contract. Finally, R Power witnessed an addition of 0.88 million of Open Interest in the near month futures contract.